Japanese pharma company buys American
In the biggest foreign acquisition ever in the Japanese drug industry, Eisai Co., the #4 Japanese drug company announced it would buy US drug firm MGI Pharma. The deal is for $3.9 billion. MGI Pharma specializes in developing cancer treatments
Eisai's most well-known drug is Aricept, the world's #1-selling treatment for Alzheimer's disease. While it makes up 38% of the company's income, it loses patent protection in 2010. It has been an active buyer over the past year. Last year it spent over $200 million to acquire cancer drugs from US-based Ligand Pharmaceuticals. Earlier this year, it sent over $300 million to acquire US-based Morphotek, a biopharmaceutical firm developing cancer drugs. It also this month bought a promising Alzheimer's drug from Sweden's BioArctic Neuroscience.
This move is part of a new push for Japanese firms to buy abroad. Faced with a static market at home and a good dollar-yen ratio, these firms are far more outward-looking than ever. Japanese companies have spent $18.7 billion buying 324 foreign companies.
Also, the buyout is part of a trend in the pharmaceutical industry. Big companies facing loss of patents are doing three things: buying small, entrepreneurial companies good at innovation, buying drugs form those companies, and/or licensing drugs form those companies. The big companies are still good at running the late-stage trials and marketing the drugs, but are not very good at creating brand new therapies.
